Major WSJ Article

There is a major article on Social Security's disability program in today's Wall Street Journal.

Recessions And Disability Claims

     From the Social Security Bulletin:

We use data from Social Security administrative records to examine the lifetime patterns of initial entitlement to retired-worker and Disability Insurance (DI) benefits across cohorts born in different years. Breaking out age-at-entitlement patterns for different birth-year cohorts reveals close adherence in entitlement ages to changes in program rules, such as increasing the full retirement age. The proportion of a cohort that becomes newly entitled to DI benefits rises noticeably during recessions and at ages 50 and 55, and cumulative entitlement rate patterns show that more recent cohorts rely increasingly on DI benefits in their late 30s and 40s.

     If you look at the actual data, the correlation between recessions and disability claims seems to be weak to the point of being non-existent. Here's what the study says further on:

To further investigate the effect of the economy and the stance of the DI program regarding new entitlements, we next examine the incidence of new entitlements by year, 1969–2006, for the same cohorts studied above. Chart 8 shows the effect of the 1974–1975 recession, with a modest increase in entitlement rates across all cohorts. The 1980–1982 double-dip recession is notable in that no increase in new entitlements occurred: Those years correspond to restricted allowance rates. However, the 1984 Social Security Amendments relaxed some of the prior restrictions and extended allowances to people with certain mental and musculoskeletal impairments. That legislation not only changed labor market conditions, it likely contributed to increases in new entitlements in the 3–4 years leading up to the recession of 1990–1991. We also see rising entitlements in the years leading up to 2000–2001. The slow pace of the economic recovery following the 2001 recession corresponds with the continued high incidence of new DI entitlements in 2002–2006.

     Basically, the report says that there is an association between recession sand disability claims except when there isn't and that increases in disability claims that come before a recession or after a recession are proof that recessions cause disability claims.
     Overall, what I see here is proof that the number of people approved for Social Security disability benefits depends largely upon the policies followed by Social Security which should surprise no one.

Not Much Parking

From the Social Security Bulletin:

Fewer Social Security Disability Insurance (DI) beneficiaries have their earnings suspended or terminated because of work than those who are actually working, partly because beneficiaries "park" earnings at a level below substantial gainful activity (SGA) to retain benefits. We assess the extent of parking by exploiting the 1999 change in the SGA earnings level from $500 to $700 monthly for nonblind beneficiaries using a difference-in-difference analysis that compares two annual cohorts of beneficiaries who completed their trial work period, one that was affected by the SGA change and one that was not. Our impact estimates, along with results from other sources, suggest that from 0.2 to 0.4 percent of all DI beneficiaries were parked below the SGA level in the typical month from 2002 through 2006. The SGA change did not yield any difference in mean earnings, although it did result in a small reduction in months spent off of the rolls because of work.

Social Security Crucial For Rural America

The map is from a report by the Southern Regional Development Center at Mississippi State University. The report notes that "In urban counties, 5 percent of personal income comes from Social Security. In rural counties, an average of 9.3 percent of personal income arrives in the form of a Social Security check." And yet, these rural counties are mostly electing Republicans to Congress and those Republican representatives seem determined to gut Social Security even though it is clear that the people they represent want Social Security to remain intact.

ALJ Suspended For Five Days

Edmund Round, a Social Security Administrative Law Judge, was suspended without pay for five days for insubordination. He appealed to the U.S. Court of Appeals for the Federal Circuit. Round has lost.

Faith Stanfield Is A Finalist

President Obama has announced four finalists in the annual "Securing Americans Value and Efficience" competition. One of the finalists is Faith Stanfield of the Social Security Administration who recommended that Social Security stop printing and mailing its employee magazine, OASIS, and just make it available online.

Quiz Answer

Question: A claimant is approved for back Title II Social Security disability benefits but dies before they can be paid. The claimant is survived by a wife who has been separated from him for ten years and who is not drawing benefits on his Social Security number and by two healthy children who are 21 and 25 years of age. He leaves behind a will that leaves his entire estate to his disabled brother. Who gets the back benefits?

Possible Answers:

• The estate, thereby giving it to the brother
• The estranged wife
• The two children in equal shares
• No one

Correct Answer: The estranged wife

Proposed Revisions To Rules Of Conduct

     The Social Security Administration has sent over to the Office of Management and Budget (OMB) a package of proposed revisions to its rules of conduct for attorneys and others who represent Social Security claimants. If OMB approves the proposal, it will be published in the Federal Register for public comment. Social Security must then consider the comments and can send final regulations back to OMB for approval. At this point, it is impossible to say what is in the proposal.

     I cannot say whether there is a connection but a reporter at the Wall Street Journal has been working on a story having to do, at least in part, with Binder and Binder, which is probably the largest entity representing Social Security claimants. Apparently, the story will not be complimentary to Binder and Binder.

     Update: OMB has added a little more information on this proposal to its website. It is supposed to be a final rule. Since there has been no proposed rule, at least not one described in this way, Social Security is apparently proposing to bypass comments. Social Security can do this but they are not supposed to unless it is either rather minor or rather urgent. I cannot see the urgency so I suppose it must be minor.